By Maria Martinez

The services sector in the U.S. continued its recovery in July rising for the second consecutive month, data from a survey compiled by the Institute for Supply Management showed Wednesday.

The ISM Services Report on Business PMI for July climbed to 58.1, up one percentage point from the June reading of 57.1. Economists polled by The Wall Street Journal expected the services PMI to be at 55.0.

ISM compiles the PMI from a survey of supply executives whose responses reflect the change, if any, in the current month compared with the previous one in certain areas of business activity. The services sector includes industries such as finance, agriculture, real estate, construction and retail trade.

A PMI reading above 50% indicates that the services sector is generally expanding, while below 50% indicates that it is generally declining.

The business activity index registered 67.2, up from June's figure of 66.0. New orders stood at 67.7, up 6.1 percentage points compared with the prior month.

On the other hand, the employment index fell one percentage point, going down to 42.1.

"Respondents remain concerned about the pandemic; however, they are mostly optimistic about business conditions and the economy as businesses continue to reopen," said Anthony Nieves, chair of the ISM Services Business Survey Committee.

However, Mr. Nieves adds that sentiment varies across industries, as they are affected differently.

Among the 15 services industries reporting growth in July, there are arts, entertainment and recreation, health care and social assistance, retail trade, transportation and warehousing, wholesale trade, education, construction, utilities, public administration, and finance and insurance. The three industries reporting a decrease in June are other services, mining, and professional, scientific and technical services.

"The economic situation is quite dire regionally, so there is no telling if this is a trend or just a short respite," said one respondent from the professional, scientific and technical services industry.

Write to Maria Martinez at maria.martinez@wsj.com

(END) Dow Jones Newswires

August 05, 2020 10:43 ET (14:43 GMT)

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